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CALIFORNIA DREAMING

BY National Center for Policy Analysis

03/27/2007

by National Center for Policy Analysis on 3/27/07.

Assembly Bill 32, the "California Global Warming Solutions Act of 2006," makes California the first state in the nation to broadly limit CO2 emissions. AB 32 establishes an overall cap on the production of CO2 and a mandatory new reporting system to track emission levels across the state. This law will force California to ramp CO2 production back to 1990 levels by the year 2020, says Matt Kibbe, president of FreedomWorks.

Even if one agrees that global warming is occurring and that human activities are the cause, California's unilateral motion to ramp CO2 production back to 1990 levels by the year 2020 are counterproductive and might actually result in greater net carbon dioxide production, says Kibbe.

First, the restrictions will lead to higher energy prices within the state, says Kibbe:

California's population was 29.7 million people in 1990 and is expected to grow to 42.2 million by 2020, according to the U.S. Census Bureau.
These new residents will create a staggering 41 percent gap between projected emissions and the limits set by AB 32.

Less allowable carbon means less energy, and less available energy, coupled with higher expected demand means higher energy prices.
Higher energy prices mean a booming market in "carbon offsets" for wealthy movie stars and their patrons and extremely unaffordable energy for the rest of working, commuting California.
Even worse:

New burdens on California's economy will do almost nothing to reduce the planet's total production of CO2.
That's because commodity markets, like those for fossil fuels, are global; carbon abstinence in California will drive the market price down for other consumers, whether they live in Nevada, Canada or China.

Higher costs instate and new demand elsewhere will help push manufacturing out of California to other states and to competing nations, which might actually result in greater net carbon dioxide production.